THE EFFECT OF DISABILITY ON LABOR SUPPLY.

This article provides an assessment of the impact of disability on the supply of labor. The definition of disability used here will be the same as that used in the 1967 Survey of Economic Opportunity, that is, a long-term, health-related impairment that limits a person's capacity to function in a job, at school, or while performing housework. Temporary conditions of ill health, such as a broken bone, the flu, or a sprained muscle, are not considered disabilities. If a person has two or more disabilities, the disability that he or she considers the more (most) important one(s) is designated a primary disability; the disability considered next in importance is designated a secondary disability. In addition, this study defines a long-term disability as one that has limited a person's capacity to function for at least twelve months. The basic model used in this study is a micro supply model, the theoretical formulation and properties of which are well known. At the foundation of this model is the basic choice between work and leisure. The results of the analysis indicate that the inclusion of measures of disability in labor supply models substantially alters a number of the results reported by labor economists.